Dealing with debt

enthusiasticsaver

Are you saying you can afford your credit card repayments plus the £400? To give effective advice we really need to see an soa. If you are making payments but then forced to use the cards to live you will get nowhere especially as interest kicks in. 

My personal choice would be to fix your mortgage as that is priority and then deal with the credit cards either by defaulting to stop interest and do a DMP or if you really are able to budget correctly and pay an additional £400 by targeting the most expensive card first. 

Lonewolf81

Statement of Affairs & Personal Balance Sheet

Summary

Monthly Budget Summary Amount(£)

Total monthly income 2,339

Monthly expenses (incl. HP & secured loans) 1,200.75

Available for debt repayments 1,138.25

UNsecured debt repayments 307

Amount left after debt repayments 831.25

Personal Balance Sheet Summary Amount(£)

Total Assets (things you own) 195,950

Total Secured & HP Debt -98,300

Total Unsecured Debt -24,950

Net Assets 72,700

Household Information

Number of adults in household 1

Number of children in household 2

Number of cars owned 1

Income, Expense, Debt & Asset Details

Income Amount(£)

Monthly income after tax 1860

Partners monthly income 0

Benefits 159

Other income 320

Total monthly income 2339

Expenses Amount(£)

Mortgage 495.9

Secured/HP loan payments 0

Rent 0

Management charge (leasehold property) 0

Council tax 106

Electricity 92

Gas 60

Oil 0

Water Rates 45

Telephone (land line) 0

Mobile phone 9.9

TV Licence 13.45

Satellite/Cable TV 0

Internet services 27

Groceries etc. 200

Clothing 5

Petrol/diesel 51.5

Road tax 3

Car Insurance 32

Car maintenance (including MOT) 5

Car Parking 0

Other travel 0

Childcare/nursery 0

Other child related expenses 0

Medical (prescriptions, dentists, opticians etc.) 0

Pet Insurance/Vet bills 0

Buildings Insurance 0

Contents Insurance 0

Life Assurance 0

Other Insurance 0

Presents (birthday, christmas etc.) 20

Haircuts 10

Entertainment 0

Holiday 25

Emergency Fund 0

Total monthly expenses 1200.75

Secured & HP Debt Description Debt(£) Monthly(£) APR(%)

Mortgage 98300 (495.9) 4.2

Secured & HP Debt totals 98300 - -

Unsecured Debt Description Debt(£) Monthly(£) APR(%)

MBNA 9300 93 27.9

Halifax 8000 80 25.9

Sainsburys 7650 134 0

Unsecured Debt totals 24950 307 -

Asset Description Value (£)

Cash 0

House Value (Gross) 195000

Shares and bonds 0

Car(s) 950

Other assets (e.g. endowments, jewellery etc) 0

Total Assets 195950

Comments on the results

You have sufficient monthly income to meet your expenses and your minimum monthly debt repayments with £831.25 left over. You can use this to pay off your debts more quickly or to build/top-up an emergency fund. Whatever your results show, it always pays to seek advice or comments from others. Why not post your SOA details on our Debt Management discussion board or on your preferred discussion forum elsewhere. Thankyou for using the SOA Calculator at www.LemonFool.co.uk

Lonewolf81

Sorry took me a while to work out how to post it. I have fixed my mortgage. The only company that would allow me to remortgage was my current lender. I used a broker. The payments will go up to £644pm on  3rd January 2024.
I am being very strict with myself and budget. Managed to get a lot of free food from olio app. Using car less etc. Xmas I'm working so I don't buy in extra food. The kids are older and understand that there won't be many gifts. Already bought for them August. No one else to buy for. The reason I'm in so much debt is due to buying a fixer upper, so most of it is house improvement on there. Also had a holiday. But it's time to pay it back and I'm committed to sticking with the budget

RWMJPMC86

Honestly - stopping payments and starting a DMP is the best move I ever made, I now repay £200 a month and its actually coming off the balance and not being paid back in interest. I'm saving to make offers of 50% of the balances and we're actually having a life again.

RAS

OK, could you reformat the SOA for MSE and repost that, if possible.

A couple of immediate pointers.

You own a home and have nothing in for building insurance or contents insurance. Just think of the poor souls ripping out their flood fouled houses this week, whose insurance lapsed earlier in the month? And sort it today. With two kids, life insurance might also be a good idea, if only reducing term insurance to cover the mortgage.

There is no way even chazzer bargains will cover clothing for 3 people. A fiver won't even cover knickers, socks and shoes for you all. How much did you spend last year? Check the statements add 10% and divide by 12.

Ditto, you have no emergency fund. You will almost certainly need to replace at least one white good item in the next two years, clear the gutters, get a boiler check, paint the windows, repair something broken. You need to allow for that cost by allocating a monthly amount in preparation for whatever.

Lonewolf81

I'm a bit technologically challenged so not sure how to reformat. 
The kids tend to buy their own clothes with pocket money they get from their Dad. I will up the allowance for myself.
If I die the kids get my pension which is around 60k and death in service. They are 17 and 14. I paid for my funeral and made a will. They get half the house each once mortgage is paid off. Plus they've got a pretty healthy child trust fund paid into via my late mother in law.

I should get Building insurance but have gambled. 

I'll readjust and try and reformat for mse

Rob5342

Lonewolf81 said:

I should get Building insurance but have gambled.

Buildings insurance is absolutely essential, what would you do if you had a water leak or a fire? That's your home for decades that you are gambling with. Please get that immediately.

Martico

I imagine buildings insurance is also a condition of your mortgage, please get it - it doesn't work out to be very expensive. Best to pay for a year upfront rather than the much more expensive monthly option.

fatbelly

You have enough income even after the mortgage increase to service your debts and start to pay them down.

Concentrate on the highest interest one, which is MBNA. Are either of those credit cards? See if you can get a 0% balance transfer.

https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/

No need for a dmp at the moment

enthusiasticsaver

I agree that considering you have fixed your mortgage and it appears to be affordable and you are able to  cover minimums at least with a healthy surplus then a DMP is not necessary.  With a low value car though you  need to save more for car maintenance than £5 per month and you definitely need contents and buildings insurance.  I would also stick £50 in an emergency fund monthly.  

If you are able to overpay by £300-£400 per month I would target the MBNA first.  Hopefully at some point you will be able to get 0% deals to move some of the MBNA or Halifax debt.